THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, HOST: Thanks Suzanne and good evening everyone.

The economy and illegal immigration are the flash points in our politics tonight, both important and emotional issues and both examples of the often stunning disconnect between what people think and say here in Washington and what you experience where you live.

Two days in Arizona this week reinforce that important lesson. I lost count of how many people across the political spectrum who think the politicians they send here and many of the people who do what I do for a living just don't get it. In 95 days we will learn how that disconnect translates at the ballot box.

Control of Congress and the direction of the Obama presidency is at stake. And at the moment most Americans share the view that the country is on the wrong track. That belief makes the president's job tough. And new numbers from the government today made it tougher. Yes, the economy is growing, but at a very, very modest rate. Not good for the party in power in a big election year.

And add this in, a leaked Obama administration memo suggesting ways to bypass the Congress and use executive powers to allow illegal immigrants to stay in the United States and to get legal status. Administrative alternatives to comprehensive immigration reform is what the authors call that memo, the president's conservative critics have a more catchy headline, the amnesty memo. Ninety-five days and yes, you bet, we're counting.

Immigration in a moment, but let's begin the debate tonight with the economy, the unemployment rate nationally 9.5 percent. In Michigan it is 13.2, but the president knows unless people begin to feel better about things and quickly, his party is in deep trouble come election day, so optimism is the president's slogan.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: It's going to take some time to get back to where we need to be. But I have confidence in the American worker. I have confidence in you. I have confidence in this economy. We are coming back!

(END VIDEO CLIP)

KING: The question, smart cheerleading or a disconnect with voters who don't share the president's confidence? Let's put that question to our great political panel tonight. Neera Tanden and to you first, at the Center for American Progress you helped Democrats craft a strategy, craft a message. How risky is that for the president?

He needs to get people to feel better, but I know he's not on the ballot this year, but that reminded me a bit of 1992 when George H.W. Bush went around the country. The numbers were beginning to turn. There was evidence the economy was starting to get better, but the voters didn't feel it yet and they looked at their president and they said what planet are you on?

NEERA TANDEN, CENTER FOR AMERICAN PROGRESS ACTION FUND: Well look, the president is making a bet and that is that he can communicate that things are getting better. He had a good story to tell about autos; jobs are coming back in an industry that people thought was long gone just a year ago. So he's hoping and he's betting that he can actually communicate that things are getting better and he still had a message of I know people are hurting, it's not great. It's not morning in America. He's not saying everything is great, but things are on the right path and this election needs to be about a choice. And the choice is to go forward or to go back.

KING: "A", Grover Norquist, can he sell that message? Obviously conservatives have opposed many of this president's policies. Can he say now, as he is saying, things are slowly getting better and if you go back to those guys, the Republicans, they will get worse. And in that context the president, as Neera said, was trying to cheer today. Many Republicans said the bailout money to GM and to Chrysler would just be socialism and the companies would still fail. The president today had a story to tell.

(BEGIN VIDEO CLIP)

OBAMA: There were leaders of the "just say no" crowd in Washington. They were saying -- oh standing by the auto industry would guarantee failure. One of them called it the worst investment you could possibly make. They said we should just walk away and let those jobs go. I wish they were standing here today.

(END VIDEO CLIP)

KING: You can see he is getting more energetic at least in making his case. How do conservatives counter him?

GROVER NORQUIST, PRES., AMERICANS FOR TAX REFORM: Well since the president took office, the country has lost three million jobs. The stimulus package is based on the idea that you take $800 billion from people who earned it, either in debtor taxes, and take it out of one side of the lake and you take your 800 billion buckets of water to the other side of the lake and you in front of the TV cameras pour -- (INAUDIBLE) -- he was standing in the middle of where a massive subsidy of other people's money had gone.

And he pours the water back into the lake. Now, the lake -- if you think the lake can get deeper by taking water out of one side and putting it into another, taking tax dollars or debt dollars and putting it into the economy over here, if you think there's more money, more jobs, more growth as a result of this policy, then you would have confidence in Obama's tax-and-spend policies, but of course taking a dollar from one side of the economy and putting it in the other makes no one better off.

TANDEN: Well I mean I think we should just listen to McCain's economic adviser, Mark Zandi, who said that these policies led to growth. And the policies that Grover and other Republicans have consistently attacked for a good long year are responsible for the benefits that we've had thus far. And if people liked what it was like at the end of 2008, they should go back to Republican policies.

(CROSSTALK)

GLORIA BORGER, CNN SR. POLITICAL ANALYST: Well you know as much as Democrats are trying to make -- turn this into a choice election, mid-term elections are always a referendum on the president. What we saw the president trying to do today is take credit for things; try to take credit for the turn-around in the auto industry. Lots of political folks out there say it's about time, because that's what the president needs to be doing if he's going to get out his Democratic base. So you can make the choice argument, but this really isn't about that --

KING: Let me let Erick Erickson -- he's standing by -- the editor of RedState.com -- in Atlanta. Erick, I want to show a graphic to our viewers -- this is real GDP annual rate change, the gross domestic product, essentially the strength of the economy, the growth of the economy. And you see in '08, that's the left, 2008 into 2009 is the left of your screen -- when it was negative.

That's when we were in recession. Above the line, that is when we came out of the recession, and the growth, 1.6 percent in one quarter, the fourth quarter last year, five percent growth. Everyone thought there maybe we've turned a big corner and instead you see since, 3.7, 2.4. That's growth, it's better than being under the line.

But it is not energetic. The president can say, Erick, it's not great, it's not perfect. We wish it would be better, but if you go back down that line they were in charge when it was below.

ERICK ERICKSON, CNN CONTRIBUTOR: You're right, although a lot of Democrats as well have been talking about the potential of a double- dip recession. And in fact that's why some of the stimulus money is going to be spread out all the way through next year because they were fearful of this.

You know consumer confidence was down again I think last week when the number came out. I've seen a number of third party surveys in swing districts lately where a lot of people, Democrats and Republicans think that the stimulus was just big government spreading money around.

And that calculation that that thought is setting in with voters, particularly independent voters that it's just more government doing more things the government shouldn't do. And Barack Obama can tout the auto industry bailout. The problem is there are a lot of independent voters who still believe that's something government shouldn't have done.

KING: And when does the psychology of elections -- because I mentioned the Bush example in '92 -- his team was always frustrated because the numbers were starting to get better. But voters had decided and if you look, the Democrats have to be worried about this, for months now, even as the numbers have started to get a little better. And they're conflicting.

There's a tug of war in the data. But people just don't change their opinion. Two-thirds or more of Americans consistently say the country is on the wrong track. They're worried about their economic future. If that number hasn't changed by now, can it change by November?

TANDEN: Well I think Democrats really hope it can and actually are arguing that the president has to be a little bit more forceful in making the economic case because there has been this argument back and forth about whether there -- you know whether we are talking -- whether we're being too cheery, cheerleading. And I think part of it is that the president has to make the case that he has a vision, Democrats have a vision, and an argument to move the ball forward.

BORGER: The number that has to change is the unemployment number. And that number is not likely to change a lot, according to economists between now and the election. And that's what people feel. And that's the problem.

KING: So how does your side handle the delicate issue that if you think the president is being too cheery and risk in being a disconnect with the voters, how do you not be the dower (ph), you know Eore (ph) saying everything is bad?

NORQUIST: Well there are challenges. It's not just the president. Remember Congress is in charge. We started collapsing jobs the year the Democrats took over the House and Senate, 2007, 2008. Those two years when the Democrats took the House and the Senate and ran economic policy --

(CROSSTALK)

UNIDENTIFIED FEMALE: Who was president at the time?

(CROSSTALK)

NORQUIST: That's my point.

(CROSSTALK)

NORQUIST: It's not --

UNIDENTIFIED FEMALE: Eight million jobs less (ph) under George Bush -- NORQUIST: It's not the president. The first two years of the Bush presidency, Democratic Senate, down two million jobs. Middle four years, when the Republicans had the House, Senate and the presidency, up five million, last two years when Democrats took credit, down two, watch who runs Congress, same thing during the Clinton administration. Watch the Congress, not the president.

KING: Erick, need you to hold that thought for one second.

ERICKSON: All right.

KING: Take a quick break -- hold the thought for one second. We'll come to you right after the break. When we come back we'll continue talking about the economy and one of the issues that is a subset of the economy, immigration. When people are looking for jobs, anxious about the future, the immigration debate turns up the volume. We'll be right back.

(COMMERCIAL BREAK)

KING: We were in Arizona the last two nights covering the feisty anti illegal immigration debate in that state; got back to Washington this afternoon after the redeye (ph) to this. An 11-page memo, an internal planning document in the Obama administration discussing ways that if Congress won't act, what could the president do using executive power to allow those who are in the country illegally to stay here, get status, eventually perhaps get in line for citizenship.

It has set off a fierce debate, conservatives call it the amnesty memo; 11 pages in total; goes through a number of executive options. And it says this. It says "the following options used alone or in combination have the potential to result in meaningful immigration reform absent legislative action."

Erick Erickson, a conservative blogosphere like RedState.com where you work, let's say got a little feisty and testy when word of this memo surfaced today.

ERICKSON: Right.

KING: What's wrong with the president using his power to do something that if you look at the polling many Americans would like to see done?

ERICKSON: Well the issue is that this has come before Congress a number of times and Congress has so far punted. And we are -- we've got this conversation from a while back with Jon Kyl where he suggested the president didn't want to secure the border unless he could get comprehensive immigration reform.

So there's a real thought that in addition to no one really taking the issue seriously because they can play it demographically in the elections, that you now have the White House trying to bypass Congress to do this. Now I've read the memo and I think it does make some good points on human trafficking and things like that. But overall there's a deep concern, just as the Democrats have with George Bush that this administration is trying to do things that Congress should probably be doing.

KING: I want to make clear as we continue the conversation; the Department of Homeland Security did put out a statement saying "nobody should mistake deliberation and exchange of ideas for final decisions. To be clear, DHS will not grant deferred action or humanitarian parole to the nation's entire illegal immigrant population." But they're saying, "A", we're just thinking about things. But "B", by saying they won't grant it to the entire population, Neera, it seems to make crystal clear they're thinking about granting it to some.

TANDEN: I mean I have to say I do not understand what the controversy is here. People in the government are thinking about other options. The president has not committed to it. People are just exploring what is possible, what's not possible. No one has made a commitment --

KING: I would bet somebody asked them to explore it, though.

(CROSSTALK)

KING: They just didn't come into work one day and say, hey let's think about --

(CROSSTALK)

UNIDENTIFIED MALE: (INAUDIBLE) Bush administration.

TANDEN: I mean look there's been a lot of pressure -- I'm sure people in the Bush administration thought of alternatives to legislation --

UNIDENTIFIED FEMALE: Right.

TANDEN: -- and if they never did, then we would be thinking they never planned for alternatives.

BORGER: But when you see it in a memo like this, what it does is it reinforces this notion of an arrogant Washington. Washington knows best, an out-of-control sort of Obama administration trying to override the Congress, trying to override the people. That's the controversy, because it just is too easy to put it in that little hole.

KING: You have long favored much of what this president would like to do, what George W. Bush wanted to do, to find a comprehensive way to do it. Why has this train gone off the tracks?

NORQUIST: Well we need to do something that deals with immigration because one of the strengths of the United States unlike other countries is that we do immigration, we do it much better than other countries. We're a growing country, not a shrinking country. We're the United States, not Europe, not Japan.

These are important. We need to do it in such a way that we bring in you know people who can do really good work in the United States. And I think we ought to be taking a million people in who are entrepreneurs, the H1B visas that you know Microsoft and other companies would like to have a lot of talented people come in to the country. Instead, we make them live over in Russia or India and then we outsource jobs to them.

Why not have more people come to the United States? And we ought to be working to try and do that. I'm not crazy about secret memos about going around Congress or discussing doing things after the election in a special session after voters are done. I think the president needs to engage the country and I think Congress needs to engage the country on immigration publicly. And they haven't done that. That's why the president is in trouble with Hispanic voters and the labor unions have been a boat anchor on any sort of meaningful reform.

KING: We're going to talk to Senator John McCain later in the program. At an event today in Arizona he said you know January, that's when might this be done -- January, the president -- no legislative proposal from the Democrats this year. Would this be something, Neera Tanden that you would recommend Democrats do in a lame duck session, which if anyone at home doesn't understand what that is, we'll have an election in November. A lot of people won't be coming back in January if they lose their elections, but Congress can still meet before -- after the election and before the new Congress is sworn in and they can do just about anything. Is that when they should do this?

TANDEN: I think Democrats should lead on comprehensive immigration reform. I think they should lead now. I don't think people should put other eggs in a lame duck. I think it would be very hard for Democrats to actually pass --

KING: You want to tell that to all the conservative Democrats in states that McCain carried or districts that McCain and Bush carried that you want them to vote on comprehensive immigration reform, including letting people stay in the country who came in illegally before the election?

TANDEN: I think that it's really a bad idea to pretend that it's not going to be an election issue if you just do it after the election. They'll get hit on that -- they'll get hit on the specter of that happening if they do that strategy. So I actually think it's better to actually do what you think is right and do it sooner versus later or spend the time and actually ensure that we do it in the next cycle. But I do not think we should just put it off and think it will be a-OK to do it.

BORGER: No, right, but -- and John, you saw this because you were just down there. People are angry because they believe that there is an enforcement problem that people in Congress and the president have not been paying attention to. Now we should say this president is sending 1,200 more National Guard troops tomorrow, right, to the border. But this is an issue that you sort of -- you can't avoid, but you've got to fix one problem at a time, don't you think?

KING: I think that's an excellent point. A time-out for everybody -- we're going to continue the conservation because when we talk about issues in Washington, they're not just in Washington, they matter in the election, so when we come back, one of the things we'll do is we'll go off to the races.

We'll show you one of the key House races this year, North Carolina's eighth district. Remember Barack Obama carried the state. He brought a freshman Democrat with him. Can the Republicans take that seat back? If they do on election night and we'll tell you starting in the east perhaps they're off to a good night.

And as I mentioned, we'll go "One-on-One" tonight exclusively with Senator John McCain. He's back in Arizona. His state is in the middle of an emotional debate on immigration and many of Senator McCain's critics say because he has a challenge from the right this year maybe he's singing a different tune on the issue.

And on our "Radar" tonight, so imagine you're a member of Congress, you're doing a radio show with the folks back home, oops, and you get pulled over. We'll play the tape. You'll hear it break down. And you always say you don't like negative ads in political campaigns, well we're going to break down the tape and show you -- it works.

(COMMERCIAL BREAK)

ANNOUNCER: Ready, we're going off to the races.

KING: When we talk about issues like the economy and immigration, we talk about them in the context, we hope, of how they play at home for you. So every night we're going to go off to the races between now and Election Day. Tonight let's wander over here; we're going to look at one of the more competitive races.

First let's just set the table for you; here are the Senate races across the country this year, there are three dozen, and they're ranked here by color code as whether they're lean Republican, lean Democrat or toss-up states. And of course, every House seat is on the ballot, all 435 of them. Again we break them down by Democrat, Republican toss-up.

You might remember this; this is what happened in the 2008 presidential election; red for McCain; blue for Obama. Tonight though we want to look at this one district right here, this is the Eighth District of North Carolina. In 2008, a Democrat came to Washington. Remember, Barack Obama won this state, the first Democrat to win North Carolina in almost forever.

So the new -- this -- here is what we got after 2008, freshman Congressman Larry Kissell. His Republican challenger this year is Harold Johnson (ph). And as I walk back over to the table this is important to note. This district had increased African-American turnout. That helped the Democratic candidate. He has been careful though because he knows it's not always a rock solid Democratic district.

So he's voted with Democrats most of the time, but voted against the Obama health care plan and the energy proposal in the House known as cap and trade. Erick Erickson, to you first, this is the kind of place you watch. And if Republicans are going to have a good night, they have to win this. They have to win this seat. If they can't take this seat back, it tells you that the Democrats have found a way in the tough districts to build a fort.

ERICKSON: Yes, I think so. And you know -- I mean -- to go with all these issues, this race and immigration and the economy, what Congressman Kissell and others know is voters are not really paying attention right now. They're getting their kids back in school -- I have got my 4-year-old here in the studio. She starts kindergarten in two weeks. And once that's over they have got about two weeks and people are going to be paying attention.

And this district given its demographic is probably going to be tough for the Democrats economically, demographically, the employment numbers, they're going to have a hard time. If Republicans see this fall early in the night, because North Carolina, I think their polls close pretty early as well, Democrats are going to have a bad night.

KING: And here's -- before we continue the conversation, here is another number I want to add to what Erick just said. This is from our new CNN Opinion Research polling. Is the government doing too much that should be left to businesses and individuals? Sixty-one percent of Americans, six in 10 Americans say the government is doing too much. You have a Democratic president and a Democratic Congress. That's not a healthy number if you're trying to defend that.

TANDEN: That's true, but polls also say that they -- people want more action to create jobs. So they -- in big debates around deficits versus jobs, people two to one, three to one want more action on jobs. And the question is who's going to do that action. So (INAUDIBLE) people have conflicting views.

I'd say about this race, it will be a tough race. Mark Critz had a tough race in Pennsylvania, won when everyone thought Republicans would pick that up. So I think you know Democrats do have formulas to hold on focusing on local issues and focusing on those issues that are popular in their districts.

KING: I want Gloria and Grover to weigh in on what they think the dynamic is. Remember Congress is about to head home for summer recess. This is when they do all their survival campaigning if you will. But first I want you to listen -- we like to go to campaign events -- we went to a John McCain town hall today in Arizona.

So they're most likely Republicans or Republican-leaning independents in the room to be fair. But listen to what I'll call the grumpiness of the crowd.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The biggest threat to this country is not our border security. It's not Obama-care. It's not the war on terror. It is our huge federal government and its out-of-control federal spending. UNIDENTIFIED MALE: Obama is supposed to be the post racial president. Since he's been in office, this has been the most racial times I've seen since I've been around.

UNIDENTIFIED MALE: And in my lifetime, I have never seen the business bashing that goes on from this administration.

(END VIDEO CLIP)

KING: Again, to be fair, this is a Republican event, so don't be -- I don't want Democrats at home going oh they're only playing Republican sound. We'll cover a lot of Democratic events, too, but when you listen to this (INAUDIBLE) tough race.

NORQUIST: Look, a year ago when the Democrats went back to their town hall meetings, this is what they were hearing. That's why they got shook up a year ago and why they're not having as many town hall meetings in Democratic congressional districts as the Republicans are having. Kissell's challenge is that while he's thrown a couple of votes for show, he votes 93 percent with Nancy Pelosi and the Democrats.

He's not a moderate. He's not voting his district. He votes Nancy Pelosi except when she lets him off the leash. Ninety-three percent is not an independent voice for North Carolina.

BORGER: I don't know. Just to take a step back, here is the way I see the president's problem. He came in wanting to be a transformational president. That doesn't mean small solutions, so he had a lot of big solutions, including something like health care reform at a time when people trust government less than they have any time in our history, worse than it was during Watergate. So you propose these solutions and they may be good, they may be bad. Whatever they are, people don't trust government to get it done.

NORQUIST: But every time he had a plan, it was for more government. He never had a plan for less government, even the things he said he was going to do when he ran, like reduce overseas occupations of other countries he did more of that --

(CROSSTALK)

ERICKSON: The overarching issue here though -- the overarching issue is that there's a growing sentiment particularly among independent voters that the stimulus didn't work to create jobs. They think that the health care plan is going to hurt small businesses. Even I mean the Center for American Progress, this great report that came out this past week had something like 57 percent wanted more efficient or smaller government because they think government does too much.

KING: We're out of time --

(CROSSTALK)

KING: Very quick -- very quick -- very quick. TANDEN: In defense of all these things, look, people want action to solve problems, I would say. And there's -- you know it's important to recognize that people, once we have more confidence and actual growth that these arguments about government activity will go away, but --

KING: Ninety-five days to continue this conversation. We'll invite everybody back --

(CROSSTALK)

KING: Good conversation -- when we come back "One-on-One" with Senator John McCain; he was Barack Obama's opponent in 2008. He faces a primary challenge in 2010 and he's right in the middle of debates about the economy and immigration. Senator McCain when we come back.

(COMMERCIAL BREAK)

KING: Our guest tonight to go "One-on-One," Senator John McCain of Arizona, the Republican presidential nominee two years ago, now he's running for reelection in his state and Senator McCain is facing a challenge from the right.

Leading comfortably, if you believe the polls at the moment, Senator McCain. A little less than a month until the primary. I want you to listen to your opponent. We had him on the program the other night, J.D. Hayworth, the former Republican congressman. I want you to listen to his criticism of you on the immigration debate and we'll talk about it on the other side.

(BEGIN VIDEO CLIP)

J.D. HAYWORTH (R), ARIZONA SENATE CANDIDATE: John still uses the poll-driven talk, "we must secure the border first," then he goes right back to "comprehensive immigration reform." John, that's amnesty. And now, he and Mr. Obama want to change the language yet again. Look in the coming days for the term "regularize," to regularize the status of illegals -- that is dead wrong. People want our laws enforced.

(END VIDEO CLIP)

KING: I want to give you a chance to respond, and Senator, I want you to do so in the context, today when you were with Governor Brewer, you said maybe in January Congress would get about the issue of immigration. If Congress gets about this issue in January, will it be a comprehensive bill that includes some sort of status for those who are here illegally?

JOHN MCCAIN (R), ARIZONA: I'm not sure what I said, but certainly I had no intention whatsoever to say January. I've said a thousand times -- actually I've said for -- since 2007, we have to secure the borders first. We can get that done, but certainly not by January. There might have been a question about whether we would take anything up in a lame duck session. I've said and continue to repeat, we have to get the borders secured first because it's obvious that the violence has escalated to a degree on the other side of the border that it's become a national security issue. We just announced the closing of our consulate in Juarez. There was a car bombing not that long ago. The list goes on and on. There are warning signs to our citizens in the southern part of our state. So, look, we have to get the border secure first.

I don't know how many thousands of times I have to say that. And we can do that with the 10-point plan that John Kyle and I have. And by the way, we don't -- tomorrow is the first of August, we still haven't heard anything about these 500 or so troops to the border that the president was going to send, and we need 3,000 on the Arizona- Mexico border. But no, January is not the time. When the border is secured is the time.

KING: I just spent a couple days in your state and you're dead right about the anxiety and it goes across the political spectrum. There's, of course, a big debate about it and a lot of disagreement about what to do about it and In the middle of that is SB1070, the new Arizona law.

Now, a judge put some significant portions of it on hold and the case will make its way through the court as we play it out, but I had a conversation the other night with the governor, because she said she needed this law because the federal government has failed to secure the border, a point you make. But, I want you to listen to the governor when I asked her what in that law would help with border security.

(BEGIN VIDEO CLIP)

KING: What in that bill would have improved border security?

GOV JAN BREWER (R), ARIZONA: Well, you know, Senate bill 1070 is just another tool in our tool box in regards to trying to address issues that we're facing here.

KING: But, you can see it wouldn't do much along the border?

BREWER: Well, you know, I'm not quite sure about that, I think -- well, not along the border, I think it would help in telling people that it is illegal to come into the state of Arizona, which it already is, but it's just not being enforced, so if they knew the states themselves were going to enforce it, that certainly would maybe give people pause before they came running across the border.

(END VIDEO CLIP)

KING: It was interesting, Senator, my conversations, there, both from the governor, Sheriff Joe Arpaio who is supporting your opponent in the primary against you, they said it's not so much the specifics of the law, as much as the tone and the message it sends to illegal immigrants that you're not welcome here and we will do everything we can to make you not feel welcome, here. MCCAIN: No. What it is frustration on the part of the governor and legislature of the state of Arizona, because we have not secured or borders. Then we are faced with what, a half million people who are in our state illegally. Our sheriffs tell us 17 percent of the people who they apprehended have committed serious crimes in the United States of America. So, the fact that we haven't secured the border then led to the frustration which then led to the legislation. If we secured the borders, there would be no reason for the legislation because we wouldn't have this problem with illegal immigrants in the state of Arizona, which are put into drop houses, mistreated, spread all over the country, along working with the drug smugglers who are killing people, beheading people in Mexico, murdering a rancher of ours, wounding a deputy. So, the point is, they passed the law because the federal government has not fulfilled its responsibility to secure our border.

(CROSSTALK)

KING: But, would the law do anything to secure the border? I understand the motivation, but would the law do anything to actually secure the border.

MCCAIN: The law will address the symptom of an unsecure border and that's a whole flood of people who are in our state illegally, many of whom have already committed serious crimes in the United States of America in our state. That's what the law will do. It will address the symptom of a broken border and that is very legitimate because the federal government hasn't carried out its responsibilities.

KING: Your friend in the United States senate, Lindsey Graham, has something else he says he is considering now because of the frustration across the country with the illegal immigration issue. I want you to listen to Senator Graham.

(BEGIN VIDEO CLIP)

SEN LINDSEY GRAHAM (R), SOUTH CAROLINA: I may introduce a constitutional amendment that changes the rules. If you have a child here, birth right citizenship I think is a mistake, that we should change our Constitution and say, if you come here illegal and you have a child, that child is automatically not a citizen.

(END VIDEO CLIP)

KING: Do you support your friend there? Do you think we need to amend the Constitution?

MCCAIN: Look, it's one of the issues, again, that's a symptom of broken borders, because people shouldn't be able to come here illegally in order to have if children. My focus right now is to get the surveillance, the people and the fences built and reinforced in order to secure our border.

I was in Israel. They've secured our borders. We can get our borders secured, then look at these other issues. But it is a serious problem when we have virtual businesses that are transporting people here to have children. But it is, again, a symptom of the serious problem that we have.

And again, everybody talks about the fact that the border is more secure. The violence on the other side of the border has escalated dramatically to the point where it is now a national security issue, and that is a big, big problem for the citizens of our state, where a lot of this is being funneled through.

KING: This debate has become politically, as you make your point there, what some would say is a big, big problem for the Republican Party. In our most recent polling, we asked Latino voters your choice for Congress this year, 54 percent Democrat, 39 percent Republican and that trend has been shifting that way as this debate in Arizona and across the country has gone on.

For the future of the Republican Party in elections two, five, 10 and 15 years from now, is your position, the party's position on this issue, potentially for a generation hurting it with the fastest growing segment of the American population?

MCCAIN: Of course I'm concerned about alienating any segment of our population, but I believe that overtime our Hispanic citizenry will understand the necessity of getting our borders secured for national security reasons. But look, I also know what the Obama administration is doing. This is a political act. This is a political move on their part, to sew up that Hispanic vote and I hope that the Hispanics will see through it for exactly what it is.

KING: Senator John McCain of Arizona, we appreciate your time tonight, sir.

MCCAIN: Thank you.

KING: Take care, Senator.

When we come back, among the items on "My Radar," a congressman gets pulled over live on the radio.

(COMMERCIAL BREAK)

KING: Welcome back. Let's check in with Joe Johns for the news you need to know, right there.

Hey, Joe.

JOE JOHNS, CNN NEWS CORRESPONDENT: Hey, John. Al Gore will not face charges over an allegation of sexual assault from 2006. This afternoon, Oregon authorities announced they're not recommending prosecution due to a lack of credible evidence. A statement from the former vice president's office says, "Mr. Gore unequivocally and emphatically denied this accusation when he first learned of its existence three years ago. He respects the thorough and professional work of Portland authorities and is pleased that this matter has now been resolved." In other news, Democratic senator Ben Nelson of Nebraska announced this afternoon he will not vote to confirm Elena Kagan for the Supreme Court. And we hear he's saying it's because he's concerned about her lack of judicial experience. But, it's interesting because apparently four Republicans have already said they're voting for her -- John.

KING: And most of those Republicans are from moderate states and Senator Nelson is from a conservative state. Joe, this one, I think, comes down to the fact that down the road somewhere Senator Nelson might be on the ballot and he's playing it safe, here. Although, significantly, he did say on the procedural cultural vote to bring her nomination to the floor, he would vote yes. So, he'll make sure he gets an up or down vote on confirmation and he'll be probably be the only Democratic no.

JOHNS: Love politics.

KING: All right, Joe, thanks so much.

Now, let's look at some stories on "My Radar." And there are some fascinating new numbers in a race we love, you know it if you tune every now and then, the Florida three-way U.S. Senate race. The Quinnipiac University poll shows Governor Charlie Crist who is running now as an Independent with a 37 percent to 32 percent lead over Republican Marco Rubio with Jeff Greene at 17 percent. Crist's lead gets larger if the Democratic nominee is Congressman Kendrick Meek.

Florida's primary coming up August 24. Greene has opened up a 10-point lead over Meek who he's hitting, he's got a lot of money to do it, hitting with a relentless barrage of negative ads. Take a peek.

(BEGIN VIDEO CLIP)

ANNOUNCER: It's a criminal fraud case tied to Congressman Kendrick Meek. Since Meek's been in congress, 650,000 more Floridians are unemployed. He took Wall Street's money and took the subprime loans that wrecked our economy.

So, that's an internal Democratic feud there, although Kendrick Meek says Jeff Greene's not really a Democrat, but I guess Kendrick Meek's to blame for the rain and for the fact I, you know, got stuck in traffic.

(LAUGHTER)

ROBERT TRAYNHAM, BUSH-CHENEY '04 CAMPAIGN ADVISOR: But, it appears to be working if you take a look at the polls.

TRAYNHAM: You're exactly right. And look, when you have a lot of money, you can define your opponent before your opponent defines you and that's exactly what Mr. Greene is doing. It's a classic race and time will tell whether or not it's going to be successful or not.

CORNELL BELCHER, DEMOCRATIC STRATEGIST: I think the interesting thing down there is, is I think that the race down there really, to me, encapsulates the problem, the toll, the damage the Tea Party is having. It's not even on civil war anymore, it's like the Tea Party -- it's unbelievable what's going on. Because, here you had a seat that Republicans had to have in order to -- for their pathway back to the Senate. The Tea Party has thrown that into turmoil where you have Crist, who's probably going to come out of that race right and that's a seat that Republicans had to have and at the end of the day we're going to look back at this and say the Tea Party was probably a negative for Republicans.

TRAYNHAM: But, truth be told, we know that Governor Crist, if in fact he wins, most likely will vote more Republican than Democrat.

(CROSSTALK)

KING: I think the Democrat in the room is conceding that that should be a Republican seat, easy.

TRAYNHAM: OK, that's fair enough. Fair enough.

BELCHER: Florida should be a Republican seat -- it's a seat that should be more yours than ours.

KING: OK, well here's another one that many thought would be more yours, being Republican, than theirs, being Democrat. New trouble, though, for Senate Majority Leader Harry Reid in Nevada's U.S. Senate race. Now a virtual tie. The latest numbers show Republican and Tea Party favorite, Sharon Angel, has closed a seven- point gap in just two weeks.

BELCHER: A seven point -- I think she's actually lost 11 points if you go back sort of over several weeks. And By the way, John, you go back six months ago, all of you all's of all of the punditcy (ph) class had Reid dead. What you're saying is, again, the Tea Party, the Tea Party sort of cutting away at the middle swath, here. And you have a guy who, who like Reid, leader Reid who people thought, you know, that's a seat that's gone, right now is getting to move ahead and sort of the voters are beginning to make that choice. You can have Angle or you can have Reid who's delivering for Nevada.

TRAYNHAM: I think it's fascinating that we're having this conversation about Harry Reid, the Senate majority lead of the United States Senate, the Democratic leader. The fact of the matter is, is that he is in a lot of trouble and the reason why is Nevadans. Regardless of whether they're Tea Partiers or not, don't like him, and that's not me talking, that's the pollsters talking, basically saying that he is very high unfavorable ratings right about now.

KING: Fourteen percent are unemployed, I think, and their home values have gone foom (ph), so...

BELCHER: It's a tough environment for all incumbents and particularly out there in Nevada; however, voters are beginning to make that choice and they're moving toward Reid.

KING: You guys might actually agree on this one. I'm going to raise the possibility. In his first interview after agreeing to step down, BP's Tony Hayward tells the "Wall Street Journal" that some of his comments like, "I'd like my life back" were wrong. Duh. But, the journal says Hayward is unrepentant about how BP handled the oil spill. Quoting Hayward, "I became a villain for doing the right thing...but, I understand that people find it easier to vilify an individual more than a company."

TRAYNHAM: You know, he clearly does not get it. He lives in a bubble and it's an oil bubble. And the reality is this is an individual who makes millions of dollars a year, who does not understand that, yeah, he wants his life back, but tens of thousands of people in the Gulf want their lives back, as well. For him to say these idiotic things is absolutely ridiculous. And thank god he's out.

BELCHER: Well said.

(LAUGHTER)

TRAYNHAM: Then we agree.

KING: All right, so let's move on to this one. That was so good. This story is not just on "My Radar," it's on the police radar, maybe even the police radar gun. California Republican Congressman Dan Lungren, doing a live radio interview, when a suburban Washington cop, well, pulled him over. Check it out, the first thing you'll hear is the officer telling the congressman to hang up, but Lungren, he's a congressman, keeps talking.

(BEGIN AUDIO CLIP)

POLICE OFFICER: Can you hang up the phone, sir?

CON DAN LUNGREN (R), CALIFORNIA: I have to get off the phone in just a moment, here. Can I call you back in just a second? I'm talking with a police officer, here.

UNIDENTIFIED FEMALE: Oh. Oh, yeah. So, before we get started you have to at least tell me what happened.

LUNGREN: Well, I was driving here, probably just slightly over the speed limit.

UNIDENTIFIED FEMALE: Oh, were we?

(END AUDIO CLIP)

KING: For the record, he was using a hands-free phone. The officer let him off with a warning. I think before he came to Congress, wasn't he the California attorney general?

TRAYNHAM: Yeah.

BELCHER: I'm sorry, but I've got to go outside the box on this. I got to think, if I get pulled over speeding and I'm yabbering (sic) away on the phone, a cop's going to pull me out and beat my butt. So, that story to me is just like -- and he got away with a warning at that. You know, I just think that's a really odd story. I think it would have been different if I get pulled over and I'm yabbering on the phone.

TRAYNHAM: Well first and foremost, and truth be told, the cop did the right thing and he pulled him over and asked him to stop the phone call conversation. So thank you to the police officer out there and the first responders who are doing their job.

(CROSSTALK)

KING: Oh, you're just -- that's a blatant appeal for a warning when they pull you over.

(LAUGHTER)

All right, I'm ending that one.

After the break, we'll tell you what has Congressman Anthony Weiner so hot.

(COMMERCIAL BREAK)

ANNOUNCER: Here comes the "Play-by-Play."

KING: All right, we're back for "Play-by-Play," the Friday edition. Before we break down the tape, I have to tell you, though, Cornell Belcher, Robert Traynham, still with us. My wife e-mailed me during the break, she told me I got to take my jacket back.

(LAUGHTER)

BELCHER: You're not going to get it.

(LAUGHTER)

KING: I don't think I could pull it off.

All right, a great race down in Georgia, the governor's race. I think we talked about it before, Sarah Palin is involved, there's a Republican run-off on August 10. In Colorado, we've heard ads about high heels and stuff on boots and I'll keep it family friendly. Well, Karen Handle is the Republican who has Sarah Palin's endorsement and she wants to talk about it.

(BEGIN VIDEO CLIP)

ANNOUNCER: One carries a purse, the other carries baggage. One woman, Sarah Palin, says cut government and is a true conservative. While the other, who added trillions to our national debt. One, a conservative reformer, one a corrupt relic of Washington, D.C.

(END VIDEO CLIP)

KING: I think we get what's going on there. We have more purses and Palin involved in this year's campaign than I think I would have thought at the beginning.

TRAYNHAM: Same here. I mean, I think the voter out there wants to talk about the economy, they want to talk about how we get out of the massive debt, they want to send the troops sent home, clearly, from Afghanistan, instead of talking about purses and high heels, they want the politicians in Washington, D.C. To figure out how to get us out of this big rut that we're in. And to sit here and to think that races are now discussed and debated about purses and hand bags and high heel shoes and jackets is ridiculous.

(LAUGHTER)

BELCHER: Well, I will give you this, I will give you this that she's -- she's trying to go after the women vote there and I think effectively, because there has been some sexism in some of these races back and forth and what you don't want, you talk a lot about the angry white man, you don't want angry white women voters. So, I think that's what she's trying to do. I actually like that commercial...

TRAYNHAM: Because a woman voter is very independent, highly intelligent and they can go either way.

BELCHER: She's clearly trying to go for the...

TRAYNHAM: The House floor is usually...

(AUDIO GAP)

KING: All right. We're not going to go to that one, because we don't have a radar, I was going to show you a good fight, but instead we're going to show you something the president hasn't done in three years, driving a car. The president was out in Detroit today, he got behind a Chevy Volt. Don't expect the president to do any laps, here. We're going to show you a little bit of the president behind the wheel, if we can play this out.

KING: Yeah. Now, that was maybe 10 or 12 feet. At least he didn't get pulled over.

UNIDENTIFIED MALE: It would have been hilarious if he took off and watch the secret service go steering after him.

KING: He said it was a pretty smooth ride. You know, the Volt, GM's got a lot invested. I remember when Bush was president, when he would get to the ranch, he would jump in the truck and go because the Secret Service don't let a president drive.

TRAYNHAM: And you got to miss that, but the good side of the story is that look, this was an industry that we all thought was dead. Presidents and Democrats stood behind beside the industry and now that industry is coming back and they will profit again and those are jobs that could have been lost, but they're there now.

KING: All right, I got to end the debate there, tonight. When we come back, we're going to talk with our "Pete on the Street" about the political wedding of the century. Maybe that's why Cornell's all dressed up. We'll be right back.

(LAUGHTER)

(COMMERCIAL BREAK)

KING: Chelsea Clinton gets married this weekend. You probably know that. A lot of the details are secret. So, who better to go out and explore what this means than our own off-beat reporter, Pete Dominick.

Hey, Pete.

PETE DOMINICK, CNN NEWS CORRESPONDENT: Hey, John King. That's right. I pretended that I was invited to this very prestigious wedding tomorrow in Rhinebeck, New York and asked people what present should I get Chelsea Clinton. They had some good ideas.

(BEGIN VIDEOTAPE)

How much money is too much money to spend on the wedding?

UNIDENTIFIED FEMALE: There's never too much money.

DOMINICK: Come one, really?

UNIDENTIFIED MALE: Half of marriages end in divorce. You spend a million bucks, isn't that down the drain?

(BEGIN GRAPHIC)

The happy couple met as teenagers at a Democratic political retreat.

(END GRAPHIC)

UNIDENTIFIED FEMALE: Well, maybe if you get a good present, they won't get divorced.

DOMINICK: If you marry her. Did you hear what she said? There's no too much.

UNIDENTIFIED MALE: She's crazy.

DOMINICK: President Clinton's daughter is getting married. What should I get her? (BEGIN GRAPHIC)

DOMINICK: I was going to get her a chair from IKEA is that kind of cheesy?

UNIDENTIFIED FEMALE: Oh no, they're a pain in the butt to build, unless you build it for her.

DOMINICK: Yeah, you would know, you look Swedish.

What should I get her?

UNIDENTIFIED FEMALE: A Viking yacht built in New Jersey by my family.

UNIDENTIFIED MALE: An iPad.

DOMINICK: Get her an iPad.

I think he was projecting. I think I know what you want, right?

UNIDENTIFIED MALE: I already have one.

DOMINICK: Of course you do, you own a yacht company.

Want to go to Chelsea Clinton's wedding with me?

UNIDENTIFIED FEMALE: Absolutely.

DOMINICK: Five hundred dollars a plate.

UNIDENTIFIED FEMALE: I have to go buy a dress.

DOMINICK: All right, we'll talk to you later.

UNIDENTIFIED FEMALE: All right, thanks.

(END VIDEOTAPE)

By the way, John King, Obama going or not going, the president?

KING: The president is not going. Here is a footnote, Pete, I want you to have. We have a great guy on the staff, he's very funny, and he's very good at his job, our political research director Rob Bune (ph), he said he noted today that Bill Clinton made $65 million since leaving office, enough for every guest to get the beef and the fish. So eat well, I know you're really going to the wedding. Pete Dominick, have a great weekend. Thanks for visiting us. That's all for us.